Page (no) 1. What are the key stakeholders in a business?.....................2 2. What is business environment?............................................5 3. What are the key types of business decisions?.....................7 Question No 1:
What are the key stakeholders in a business? Answer:
Before discussing about the key stakeholders in a business, it is important to know about what is meant by a stakeholder? A person or group of persons that has interest in a business or any organization is called a stakeholders. There are main five types of stakeholders named:
Now each of the above mentioned is discussed in brief detail. Owners:
A business starts when an entrepreneur or a group of entrepreneurs make plans and take decisions to create a product or provide a service. In united state more than 08 million people are enjoying the entrepreneurship. The entrepreneurs create new products or the consumers want the business to improve the existing product, that’s why they are very critical to the development of the newly created business. If the entrepreneurs expect a good reward of their efforts, only then they are willing and agree to start a business The term reward has different meanings for different groups of people. Some people mean the reward as a large amount of income. Some wish to be their own masters, and not have to go to work for someone else, and others think they love the challenges involved in starting a business People should know about how a business operates before they start a new business. Center for entrepreneurial leadership survey declared that 69 percent of high school students have an interest in starting their own business but, 86 percent of the students showed their business knowledge as very poor. The proportion of the firm owned by the existing owners is reduced when the ownership is shared. Many firms have developed because they sell a proportion of their stock to other investors. Now these investors are the owners of the stock of the specific business. The investors who buy the stock of the particular business are called the shareholders of that business. Cisco system, IBM, and general motors were small business at the beginning, but now they have millions of shareholders. Shareholders can sell their share any time. When the performance of a firm is good then the shareholders can sell their shares at high prices and vice versa. The company Dell performed very well in some certain years; as a result they doubled their investment, while on the other hand the Enron and Global Crossing firms went bankrupt and lost all investment. A firm is expected to invest the money of the shareholders in a manner that will increase its performance and value, and then the firm should be able to provide good return to the share holders. Creditors:
A firm needs financial support more than what the owners provide. Before the revenue starts, a firm has to incur expenses like it may need to buy the plant and machinery, hiring of employees, or rent a facility. In the beginning a firm expenditure may cross its revenue. Therefore the firm can not rely only on its revenue. It takes help from the friends and family and now a days from other financial institutes also. These financial institutions or creditors provide loan to the firms which are in need of it. Bank of America, SunTrust Bank, and a lot of other commercial banks primarily work as creditors to the firms. Creditors advance loans on interest to the firms. Firm have to repay the loan to the creditors along with interest over time. Some large firms like General motors and DuPont have billions of dollars in debt. The creditors or the financial institutions or the commercial banks will advance loans the firms only if they are sure enough about the performance, and that the firm will...
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